The Australian share market has closed at a fresh four and a half year high, taking its lead from Wall Street's record-breaking finish.

At the close today, the benchmark S&P/ASX200 index was up 41.4 points, or 0.82 per cent, at 5,116.8 while the broader All Ordinaries index was 42.8 points, or 0.84 per cent, higher at 5,130.9.T

he benchmark ASX200 index jumped 0.85 per cent to 5118 points within the first hour of opening as the global outlook brightens.

Earlier todayAt 12pm AEDT, the benchmark S&P/ASX200 index was up 55.5 points, or 1.09 per cent, at 5130.9 points.

Official figures released today showed that Australia's economy grew by 0.6 per cent in the last three months of 2012, largely in line with expectations.

The rally on global stock markets was driven by the new Chinese leaderships vow to maintain its growth target, an improving US outlook and investors betting the US, UK and Japanese central banks will continue stimulus measures.

The Dow Jones Industrial Average powered to an all-time record high overnight exactly four years after hitting bottom in the worst economic crisis since the Great Depression.

After more than doubling its value in a steady march upward since March 2009, the Dow assaulted the record from the opening bell and ended the day at 14,253.77, nearly 90 points above the former closing high on October 9, 2007.

The broader index of the US markets, the S&P 500, also settled higher, but at 1539.79 remained 1.6 per cent below its all-time trading high. It was a dramatic rebound that came even as the broader economy continues to struggle to leave behind the 2008-2009 recession, and the government in Washington battles over how to trim its massive deficit, a legacy of the economic crisis.

"It's been a good economy, accompanied by good earnings, coupled with very low interest rates. And no sign that it's over," said Hugh Johnson, chairman and chief investor officer at Hugh Johnson Advisers.

"And it's the only game in town," he said, referring to the low returns on other investments.

The Dow, which weighs the stock prices of 30 top companies in a range of industries, and been a key gauge of health in US capital markets for 117 years, was last at these levels in October 2007, the virtual eve before a financial storm engulfed markets.

A bursting of the housing market and stocks bubble unleashed the deepest recession since the 1930s. In the crash the Dow plunged 54 per cent over 15 months, the impact wiping out the savings of millions and feeding a crisis in the financial industry that forced the government to bail out banks and two major automakers.

But the rebound of company earnings coupled with low Federal Reserve interest rates have fed the recovery in the stock markets.

Also helping has been a set of recent economic data that has been generally solid, if unspectacular. It has raised new questions of whether a fresh, dangerous bubble is building in capital markets, an issue that has been debated in recent meetings of Fed policy makers.

But analysts mostly dismiss that, and describe rising, but cautious, confidence in the real economy.

Compared with the economic conditions in 2007, today's market looks stronger, said Art Hogan of Lazard Capital Markets. For one thing, corporate balance sheets are robust.

"The economy is in a better place," said Mr Hogan. "The last time we were here, the economy was about to fall off a cliff."

Greg Peterson, director of research at Ballentine Partners, said the valuation multiples of earnings are low compared with historic norms.

"This high is imminently reasonable," Mr Peterson said. "It's not a bubble."

The overnight surge came on the heels of rising equity markets in China and throughout Europe, said Chris Low, chief economist at FTN Financial.

The rally gained additional support mid-morning from a pickup in US services sector growth in February, according to the ISM purchasing manager survey.

Still, recent economic reports suggests that the Dow is outpacing the economy as a whole. Last week, the US Commerce Department reported that fourth-quarter economic growth came in at just 0.1 per cent, and the unemployment rate has been stuck around 7.9 per cent.

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